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Malaysia (EWM), mentioned here before, continues to look toppy in spite of recent strength in Asia.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RnG0RAmb0jI/AAAAAAAAC18/24CP4ZlU0XM/s400/0614-ewm.jpg
I mentioned Goldman Sachs (GS) before. It had pushed its way to a new high yesterday, but once earnings were released, the stock fell on the news. It's not that the earnings were bad - on the contrary, they blew away expectations. But "buy the rumor, sell the news" is as true now as ever.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RnG0RQmb0kI/AAAAAAAAC2E/ZpwjrdwxY6k/s400/0614-gs.jpg
My puts in JC Penney (JCP) continue to do well, although nothing really great is going to happen unless/until the neckline shown on the pattern breaks. But it could be soon.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RnG0RQmb0lI/AAAAAAAAC2M/bwjRcWEMQ5Y/s400/0614-jcp.jpg
Gary mentioned my "bearish" energy suggestions; not at all. I think in passing I mentioned CVX and/or XOM for those who considered energy overbought. But I've devoted whole entries recently (such as "Sheer Energy") to the fact that this is the one sector that looks really bullish. The new high on the OIH today is no surprised, nor is the strength of such stocks as APA, SLB, and SWN.
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Gary mentioned my "bearish" energy suggestions; not at all. I think in passing I mentioned CVX and/or XOM for those who considered energy overbought. But I've devoted whole entries recently (such as "Sheer Energy") to the fact that this is the one sector that looks really bullish. The new high on the OIH today is no surprised, nor is the strength of such stocks as APA, SLB, and SWN.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RnG0Rgmb0mI/AAAAAAAAC2U/Xiv34WGe0eM/s400/0614-oih.jpg
PEG is another promising-looking stock to short, similar to CEG's pattern.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RnG0Rgmb0nI/AAAAAAAAC2c/PYrrt0sytpg/s400/0614-peg.jpg
Finally, your clip of the day. This beautifully captures how I've been feeling about the comments section (especially the TTT situation). There comes a point when I just want to jump off the train.
at 6/14/2007 70 insightful comments
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Labels: ceg, dia, ewm, gs, jcp, oih, pee wee herman, peg
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Wednesday, June 13, 2007Snapback and Logo Vote
Today's snapback rally - the best day this year for the Dow, I read - is no surprise. In fact, it's a bit of a relief. A number of readers wrote me before the opening bell today and expressed their desire that the market would push higher to give them a good chance to sell into the strength. So - wish granted!
I wanted to ask your opinion about something. I wanted to doll up the blog a bit with a logo, and I've got four choices. Instead of just me picking my favorite, I'd love to hear your opinion. It won't take a moment....
The question on everyone's mind - mine included! - is whether the recent sell-off was just a bit of profit-taking in an otherwise uninterrupted bull market. Maybe. But a one-day rally isn't going to change my views. I closed out a handful of positions today, but by and large I am holding strong.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RnBi8gmb0iI/AAAAAAAAC10/AKPJAAyo6EY/s400/0613-%24indu.jpg
The Russell 2000 - which between puts on the $RUT and puts on the IWM seems to be the most tradeable index on the market - is at a crucial point. It pushed through the supporting trendline but is now within its channel again. The next two days are crucial. If the market pushes higher the rest of the week, a lot of my arguments over the past couple of days are kind of shot.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RnBiyAmb0ZI/AAAAAAAAC0s/mN9ZsHPGvoE/s400/0613-%24rutminute.jpg
Apple, my "short it!!" topic earlier this week, fell nicely today in spite of the overall market roaring higher. That is a very, very good sign. My puts are up 75%.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RnBiyQmb0aI/AAAAAAAAC00/hoXrSAvrk60/s400/0613-aapl.jpg
A few reiterations of earlier bullish suggestions that still look good. JetBlue (JBLU):
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A few reiterations of earlier bullish suggestions that still look good. JetBlue (JBLU):
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RnBiyQmb0bI/AAAAAAAAC08/CbcHEQd9Q7o/s400/0613-bulljblu.jpg
ONT, with a stop at $2.56:
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RnBiygmb0cI/AAAAAAAAC1E/a_TzsnXQ4uo/s400/0613-bullont.jpg
And Southwestern (SWN):
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RnBiywmb0dI/AAAAAAAAC1M/QvbyIaUM51A/s400/0613-bullswn.jpg
Side note to Timothy Sykes - thanks for the book. I'm flattered, and I'll check it out!
at 6/13/2007 45 insightful comments
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Labels: $indu, $rut, aapl
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Tuesday, June 12, 2007...And an Awful Lot Like Me.....
First off, if you didn't get around to reading you should. It rules.
The trend change that I have been hoping, praying, and wishing for might (I say MIGHT) be here. Whether it is or not, the past week or so has been very good to me. Successful trading comes with itsbut I'm enjoying myself. Watching the Dow go from a 90 point deficit to a 20 point surplus today, I had the sense that it was time to get more puts. And that was the right move. Lower lows and lower highs seems to be the rule of the day.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm8l0gmb0VI/AAAAAAAAC0M/7THof8D1sPo/s400/0612-%24ohgodyuck!.jpg
The "culprit" of all this wonderfulness is soaring interest rates. One reader (who shall remain nameless but I shall refer to as SuperCOT COTLover) opined that interest rates aren't going to go up forever. Well, ummm, that's right. But they weren't going to go down forever either. Believe me, there's plenty more that can go wrong to help add fuel to this wonderful fire.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8l0wmb0WI/AAAAAAAAC0U/_8uave0_7j0/s400/0612-%24interest.jpg
Someone else asked to see my positions. Anyone blinkered enough to spend time every day sharing his best charts and thoughts for no money is stupid enough to show all his positions too, so here goes (the bold items are puts; everything else is a short):
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8l0wmb0XI/AAAAAAAAC0c/0hsMFAbs2Ek/s400/0612-%24positions.jpg
Remember that channel I mentioned yesterday for the Russell 2000? Well, it was cracked today. Good.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8l0wmb0YI/AAAAAAAAC0k/ZHtP0ZqqDPk/s400/0612-%24rut.jpg
And the S&P 500, which had been floating above its channel for a while now, has now achieved - if you will - double penetration. The index is within the bounds of its channel once more. Which only means it is at the very highest reaches of its channel, with ample more room to fall.
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And the S&P 500, which had been floating above its channel for a while now, has now achieved - if you will - double penetration. The index is within the bounds of its channel once more. Which only means it is at the very highest reaches of its channel, with ample more room to fall.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm8logmb0QI/AAAAAAAACzk/X9WtV2vZzAk/s400/0612-%24spx.jpg
And, not surprisingly, the $VIX has been zooming higher lately. Even at these levels, we are far, far below historical averages. During saner times, the $VIX would occasionally push above 50.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lowmb0RI/AAAAAAAACzs/vZVijg8_iNk/s400/0612-%24vix.jpg
ALB, which I've been short for a while, has now completed its pattern. Huzzah!
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lowmb0SI/AAAAAAAACz0/lm0pWrUuW74/s400/0612-alb.jpg
Oh, remember back on May 22nd that I suggested BTJ as a short? I've marked it with an arrow here. How's that for a call, folks? I (stupidly) closed it out a couple of days ago for a nice profit, but, again, it was just stupid. There was no solid reason to cover the position.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lpAmb0TI/AAAAAAAACz8/0cN0iHRKL9k/s400/0612-btj.jpg
CAM is another one dozens of great short/put candidates.
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CAM is another one dozens of great short/put candidates.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lpAmb0UI/AAAAAAAAC0E/ZZuWNYZmre8/s400/0612-cam.jpg
And the DIA is a great general way to play the market downturn via puts. This is a gorgeous chart. Stop price of 134.76 on this one, if memory serves.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lMAmb0LI/AAAAAAAACy8/JkepLbNFHw4/s400/0612-dia.jpg
My puts on GOOG are doing well. This is a failed breakout pattern. For such an expensive stock, there is nothing sweeter.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lMQmb0MI/AAAAAAAACzE/vJnrTm-st0s/s400/0612-goog.jpg
I'm avoiding real estate shorts, pretty much (I've got one or two). Looking at IYR, it is approaching a supporting trendline. Of course, if you read about the billions upon billions of dollars in mortgages that are about to explode, it could be that the real estate downfall has only just started trickling in.
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I'm avoiding real estate shorts, pretty much (I've got one or two). Looking at IYR, it is approaching a supporting trendline. Of course, if you read about the billions upon billions of dollars in mortgages that are about to explode, it could be that the real estate downfall has only just started trickling in.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lMgmb0NI/AAAAAAAACzM/mwYZlvEw1fY/s400/0612-iyr.jpg
My JCP puts are doing well, although his pattern is not complete yet. But it has a very good shot of doing so.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lMgmb0OI/AAAAAAAACzU/XeOVl3mJ04k/s400/0612-jcp.jpg
Check out Sears Holding (SHLD). It has crossed its 20, 50, and 200 day moving averages! Now the fun can really begin.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm8lMwmb0PI/AAAAAAAACzc/uNKcjcbWOec/s400/0612-shld.jpg
And for all those who used me as a contrary indicator........keep holding those positions, boys. I'm sure you're right and they'll be back in the black in no time. In fact, double up. You know I'm wrong.
XTC........
at 6/12/2007 54 insightful comments
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Labels: $spx, $vix, abby joseph cohen, btj, cam, dia, goog, iyr, jcp, positions, shld
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Monday, June 11, 2007Short the iPhone (and everything else.....)
Let me save the bulls some time and say two things: first, I am jumping-up-and-down, wild-eyed, chart-crazed bearish right now. So if you want to take that as a marvelous contrary indicator, please do so. Second, I've even done some legwork for you. The call option on the S&P 500 for July at $1,625 (which, gosh, should be easy - that's only 7.5% higher than the current market) is a mere 40 cents asking price! The symbol is SPB-GE. Go nuts.
Now, as you can see from the graph below, Apple's stock did pretty good after the introduction, but it faded back again, and it sank to even lower lows. The stock got down to something like $6.50 (don't you wish that time machine was handy, folks?) So the iPod clearly wasn't seen as any kind of savior for the company, nor was it the object of frenetic optimism.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/Rm4AFQmb0JI/AAAAAAAACys/eOP53PKJsx8/s400/0611-%24aaplipodintro.jpg
So what happened next? Well, the Apple magic started to work. The brilliance of offering an accessible way to purchase music, great software to manage your music collection, and an elegant, highly mobile piece of hardware started to take hold. And Apple's stock moved up not hundreds of percent, but thousands of percent. The iPod made Apple more successful (and the stock more expensive) than ever.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rm4AFgmb0KI/AAAAAAAACy0/8ASJ7Cs70Tk/s400/0611-%24aaplpercent.jpg
Which brings us to today. Apple is deep into triple-digit territory. Steve Jobs would probably win the presidency of the U.S. if he ran. And there are thousands of Apple zillionaires running around Cupertino. The company seems like it can do no wrong. I notice even put Apple right on its front cover last week.
I took all this into account. And although I rarely depart from charts as my rationale for decision-making, I bought a bunch of Apple puts early this morning. And, as the market closed today, those puts were already up 35%. Not bad.
Now, it's not that anything horrible was announced from Apple today. Steve Jobs gave a talk at the WWDC, and everything seems pretty hunky dory. But if I can smell a top, folks, this is it. And I'm not predicting Apple will wind up like a completely devastated shell like, oh, Sun Microsystems. But if the contrary workings of hype have any merit, this has got to be one of the all-time great hype fades of modern history.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/Rm3_4wmb0EI/AAAAAAAACyE/WoQ-ahn9IL4/s400/0611-%24aapltoday.jpg
Phew. OK. Back to the markets. As I said earlier, I'm more bearish than normal. Which is saying something. Part of the reason is that, viewing the $SPX minute graph, I sense a sea-change has taken place in the trend. I've drawn it below.
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Phew. OK. Back to the markets. As I said earlier, I'm more bearish than normal. Which is saying something. Part of the reason is that, viewing the $SPX minute graph, I sense a sea-change has taken place in the trend. I've drawn it below.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/Rm3_5Amb0FI/AAAAAAAACyM/9-FGt2DSZ1s/s400/0611-%24spxminute.jpg
I have acquired an ungodly quantity of Russell 2000 puts, predicated on the notion that the channel, drawn below, will likely be broken. And the beauty part is that if I'm wrong, I'll know swiftly, and my losses will be manageable.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm3_5Qmb0GI/AAAAAAAACyU/ATTAYmvYtsA/s400/0611-%24rut.jpg
I look at a chart of the $INDU below and get so excited I must excuse myself from standing for fear of embarrassing both myself and those around me. (In addition to generating pangs of jealousy amongst my bullish readers). To me, this is a chart jumping up and down, shouting "Top!" with great gusto.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/Rm3_5Qmb0HI/AAAAAAAACyc/GHnRIa9oyIg/s400/0611-%24indu.jpg
Reducing the granularity of the chart to a weekly from a daily, we can plainly see the bearish engulfing pattern which took place last week. This week - Wednesday, Thursday, and Friday, to be specific - is loaded with important economic indicators. Here's hoping they shove the markets lower and help increase the minuscule bits of angst floating about into